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A Special Report on Selected Side Events at the Second Conference of the Parties serving as the Meeting of Parties to the Kyoto Protocol (COP/MOP 2) and Twelfth Conference of the Parties (COP 12) to the UN Framework Convention on Climate Change (UNFCCC)
6-17 November 2006 | Nairobi, Kenya
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Events convened on Monday, 6 November 2006

Smallholder carbon development projects: linking climate change mitigation with poverty reduction

Presented by ICRAF

Louis Verchot, World Agroforestry Centre (ICRAF), explained that Clean Development Mechanism (CDM) projects should generate concrete development and environmental benefits in host countries and that these benefits should be distributed equitably across countries. Stating that smallholder land use and land-use change and forestry (LULUCF) projects can allow some of the poorest people in the world’s poorest countries to enter the carbon market, he lamented that many bottlenecks currently hinder this possibility.

Njogu Kahare, Green Belt Movement, highlighted the potential of CDM-supported reforestation projects on gazetted forests, farms and public lands in Kenya. He emphasized that communities need support to simultaneously increase tree cover in farm areas and regenerate forests. Highlighting a pilot CDM project with support from the World Bank, he stressed that the current price of carbon is inadequate to make such projects viable.

Jonathan Haskett, ICRAF, stated that CDM rules need to change to increase participation of, and benefits to, the world’s poorest countries, particularly in sub-Saharan Africa. He suggested changes, including: removal of the 1% restriction on Annex 1 countries’ use of LULUCF and increasing the small-scale project limit for LULUCF projects from 8,000 tons to 60,000 tons. He stressed that LULUCF project types should expand beyond afforestation and reforestation projects.

Keith Shepherd, ICRAF, explained that lack of accurate, cost-effective methods for measuring and monitoring carbon stocks over large areas has been a major impediment to smallholder carbon development projects. He highlighted a range of new tools to overcome this bottleneck.

Adam Tuller, Africa Conservation Trust (ACT), introduced the Rural Transformation Scheme, an ACT initiative that seeks to increase tree cover in Kenya while simultaneously addressing water security and livelihood issues. He highlighted the difficulties in adapting CDM to the ‘practical requirements’ of Africa as well as the need to extend the crediting period to at least 25 years.

Participants discussed, inter alia, the tensions that can exist in creating pro-poor carbon projects and the differences between large-scale commercial plantations and small-scale LULUCF projects.

Jonathan Haskett, ICRAF, stressed that LULUCF projects should be allowed under the EU-ETS system, suggesting that this would increase the financial viability of such projects
Louis Verchot, International Centre for Research in Agroforestry (ICRAF)
Njogu Kahare, Green Belt Movement, explained that CDM-supported reforestation projects can help provide fodder and fuel for communities, control soil erosion and, over the long term, protect the natural resource base and improve rural livelihoods
Participants during Njogu Kahare's presentation.
Louis Verchot <>
Njogu Kahare <>
Jonathan Haskett <>
Keith Shepherd <>
Adam Tuller <>

Preparing technology transfer projects for financing

Presented by UNFCCC

Bernard Mazijn, Expert Group on Technology Transfer (EGTT) Chair, introduced the event, noting that technology transfer and financing will be at the heart of negotiations.

Wanna Tanunchaiwatana, United Nations Framework Convention on Climate Change (UNFCCC), underscored the technology transfer and existing opportunities under the UNFCCC. She noted the key themes to promote technology transfer are elaborating countries’ technology needs assessment (TNAs), having access to technology information, and enabling activities and funding.

Margaret Martin, EGTT member, summarized EGTT work in the area of innovative financing, including the Montreal and Bonn Workshops organized in collaboration with the private sector. She underscored that the workshops concluded that there are considerable financial resources available for projects but many projects are poorly elaborated and unable to attract investment.

Philip LaRocco, E+CO Energy Through Enterprise, outlined the UNFCCC “Preparing and presenting proposals: Guidebook on preparing technology transfer projects for financing” and highlighted key elements of a proposal, including: the core concept (product, service, client and technology), the setting (location and market), the team, the implementation plans, expectations, contingencies and the audience.

Emma Staub, E+CO Energy Through Enterprise Africa, described examples of technology transfer projects in Africa, including a solar water heater for large institutions in South Africa and a solar energy projetct in Tanzania. She outlined the short and long-term benefits of such projects, including: access to cheaper energy and heated water to communities; creation of jobs; and reduction of greenhouse gas (GHG) emissions.

Thomas Verheye, EGTT member, presented the new initiative of the European Commission of the Global Energy Efficiency and Renewable Energy Fund (GEEREF) of € 100 million. He explained the fund is based on risk capital or equity and stressed that GEEREF will fund projects on biomass, wind, hydro, solar and geothermal, utility based and distributed generation, biofuel, manufacturing, energy service, trading microfinance ventures and energy efficiency.

Philip LaRocco, E+CO Energy Through Enterprise
Margaret Martin, EGTT member, said the most critical conclusion from Montreal and Bonn workshops was the need for tools to improve project preparation to attract finance
Wanna Tanunchaiwatana, United Nations Framework Convention on Climate Change (UNFCCC)
Bernard Mazijn, Expert Group on Technology Transfer (EGTT) Chair
Philip LaRocco, E+CO Energy Through Enterprise, outlined the UNFCCC “Preparing and presenting proposals: Guidebook on preparing technology transfer projects for financing”.
Emma Staub <>
Thomas Verheye <>
Bernard Mazijn <>
Margaret Martin <>
Philip LaRocco <>
Wanna Tanunchaiwatana <>

CARE Brasil Social Carbon Fund - Carbon credits: from preserving the environment towards alleviating poverty

Presented by Ecologica Institute

Markus Erwin Brose, CARE Brasil Social Carbon Fund, launched the CARE Brasil Social Carbon Fund, a partnership between CARE Brasil, an NGO that focuses on alleviating poverty worldwide and, a private company with carbon market expertise. He underscored this initiative will provide new funds for small-scale projects on biofuels, landfills and afforestation and reforestation. Brose announced that the fund aims to attract a variety of investors, including those who need to comply with carbon targets or would like to promote social responsibility.

Divaldo Rezende,, noted delivers market-based solutions to help companies address climate change issues, including: brokerage services related to GHG, renewable energy and other environmental products; and sourcing and delivery of emission offsets. Noting there is no LULUCF project in Brazil, he underscored the fund aims at integrating local communities in CDM projects and changing the reality of poor communities in a sustainable manner. Stressing that the fund will become operative in the next three months, Rezende said investors will receive back Certified Emission Reductions (CERs), which can be sold in the market or used for compliance.

Discussion: Answering a participant’s enquiry, Rezende said the methodology used for identifying the social gains obtained by communities when reducing GHG emissions is based on the sustainable livelihoods approach. Another participant asked how CO2e would harmonize its brokerage activities with reducing poverty and Rezende reasoned that in the fund, selling CERs is not compulsory for the investors and not linked to brokerage activities.

L-R: Markus Erwin Brose, CARE Brasil Social Carbon Fund, and Divaldo Rezende, during the discussion session
Markus Erwin Brose, CARE Brasil Social Carbon Fund, noted that Brazil holds the second largest number of CDM projects and that most of them are owned by large corporations
Divaldo Rezende,, highlighted the social gains that can be obtained with carbon projects
Markus Erwin Brose <>
Divaldo Rezende <>

Rivers of no return: how climate change is affecting the world’s great rivers

Presented by Greenpeace International

Carlos Rittl, Greenpeace International, showed a documentary on the impact of climate change on Brazilian livelihoods. He pointed out that the Amazon is a powerful atmospheric regulator but that it faces numerous threats. He stressed that deforestation has increased between 2000 and 2005, with 130,000 square kilometers lost. Rittl said that land-use change is causing unprecedented impacts in the Amazon with biodiversity losses of unknown magnitude. He added that climate change has resulted in temperature increases of 0.63 degrees centigrade in the last 100 years and changed rainfall patterns.

Rittl underscored that the impacts of changed climate patterns include primary forests becoming transitory forests, threats to species, rainfall pattern changes and extreme climate events with more frequent droughts and floods. Rittl urged the Brazilian government to take immediate action to develop policies and provide resources for combating deforestation and promote the sustainable use of natural resources. He called for action at the international level towards deeper and broader cuts in the Annex 1 parties’ emissions for the second commitment period.

Discussion: A participant commented that adaptation to climate change is not just an issue for Brazil but for other industrializing countries and suggested the Global Environment Facility (GEF) could design adaptation models for alternative community livelihoods.

Carlos Rittl, Greenpeace International, emphasized that an increase of two to three degrees Celsius in atmospheric temperature could result in a “collapse” of the Amazon
L-R: Carlos Rittl and Steve Sawyer, Greenpeace International
More information:
Carlos Rittl <>

Towards a sustainable bioenergy strategy: the role of international trade

Presented by ICTSD

Moustapha Kamal Gueye, International Centre for Trade and Sustainable Development (ICTSD), highlighted the possibility for import substitution of biofuels and their export potential, particularly for developing countries. He stated that biofuels can lead to GHG emission reductions but warned that environmental and social factors, as well as the balance between fuel and food security, must be considered.

Christophe Bellmann, ICTSD, discussed the applicability of the World Trade Organization (WTO) rules to biofuel trade, focusing on tariffs, subsidies and standards. He highlighted the relevance of the Doha negotiations on Environmental Goods and Services regarding tariffs, and noted the potential compatibility of consumer subsidies.

Ancha Srinivasan, Institute for Global Environmental Strategies, said there is both interest and concern in biofuels in Asia, and cautioned that Brazil’s success with sugarcane might not be replicated elsewhere given the need to understand each country’s context. He added that many Asian countries have started putting mandatory standards in place and are looking for more biotechnology innovations.

John Coequyt, Greenpeace, suggested that international pressure for Brazil to export biodiesel products will continue. He noted that the terms of employment for production of ethanol from sugarcane in Brazil are slanted in favour of large corporations. He cautioned that discussion on biofuels are complex and emphasized the need for a rigorous and sophisticated way to understand their global warming mitigation potential.

Participants discussed, inter alia, the need to consider ethanol and biodiesel separately and the potential environmental risks of allowing biofuels trading, particularly without sufficient standards.

Christophe Bellmann, ICTSD, noted that ethanol is considered an agricultural product and biodiesel is considered an industrial good under WTO rules and explored the implications of this differentiation for biofuel trade
Moustapha Kamal Gueye <>
Christophe Bellmann <>
Ancha Srinivasan <>
John Coequyt <>
The Earth Negotiations Bulletin on the Side (ENBOTS) © <> is a special publication of the International Institute for Sustainable Development (IISD). This issue has been written by Karen Alvarenga, Ph.D., Alexandra Conliffe and Atieno Ndomo. The Digital Editor is Diego Noguera. The Editor is Lisa Schipper, Ph.D. <> and the Director of IISD Reporting Services is Langston James “Kimo” Goree VI <>. Funding for ENBOTS at this meeting has been provided by the donors who support the Earth Negotiations Bulletin. The Sustaining Donors of the Bulletin are the Government of the United States of America (through the Department of State Bureau of Oceans and International Environmental and Scientific Affairs), the Government of Canada (through CIDA), the United Kingdom (through the Department for International Development - DFID), the Danish Ministry of Foreign Affairs, the Government of Germany (through the German Federal Ministry of Environment - BMU, and the German Federal Ministry of Development Cooperation - BMZ), the Netherlands Ministry of Foreign Affairs, the European Commission (DG-ENV) and the Italian Ministry for the Environment and Territory General Directorate for Nature Protection. General Support for the Bulletin during 2006 is provided by the United Nations Environment Programme (UNEP), the Swiss Agency for Environment, Forests and Landscape (SAEFL), the Government of Australia, the Austrian Federal Ministry for the Environment, the New Zealand Ministry of Foreign Affairs and Trade, SWAN International, the Japanese Ministry of Environment (through the Institute for Global Environmental Strategies - IGES) and the Japanese Ministry of Economy, Trade and Industry (through the Global Industrial and Social Progress Research Institute - GISPRI). The opinions expressed in ENBOTS are those of the authors and do not necessarily reflect the views of IISD and other donors. Excerpts from ENBOTS may be used in non-commercial publications with appropriate academic citation. Electronic versions of issues of ENBOTS from the UN Climate Change Conference - Nairobi 2006 can be found on the Linkages website at For information on the Bulletin, including requests to provide reporting services, contact the Director of IISD Reporting Services at <>, +1-646-536-7556 or 212 East 47th St. #21F, New York, NY 10017, USA. The ENBOTS Team at the UN Climate Change Conference - Nairobi 2006 can be contacted by e-mail at <>.

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